Commodities – gold rose above the psychologically important $1,300/oz level this week as the US dollar slumped to its weakest in over a year.

After enjoying its best quarter in 30 years in the first three months of the year, there is once again a shine to the yellow metal. But can it last? Here’s five reasons to watch gold over the coming months.

Fed

All eyes are on the Federal Reserve as it toys with the idea of raising rates again this year. Investors need to note that gold’s rally came off the back of the Fed’s decision in December to hike rates for the first time in a decade.

The 16% gain for gold spot prices in Q1 was the best three-month rally since 1986. Prices have continued to edge higher in the second quarter, with gold now up more than 20% year-to-date.

But increasingly the central bank is pushing back expectations it will raise rates in 2016. The slower pace of tightening is seen as more supportive of gold compared with a rapid series of hikes.

Negative rates

Gold yields nothing, so is generally less favoured when nominal rates are higher. And in a world of negative interest rates, gold may be a defence against capital loss.

From the European Central Bank to Japan, negative interest rates are in vogue and have been a boon for gold. Zero yield is better than a negative one, so investors seem to be saying.

But it’s not just the mechanics of negative rates – investors are increasingly concerned that these are a symbol of central banks’ inability to stave off a financial meltdown.

US Dollar

The dollar’s slump in 2016 has also caught investors off guard and helped to drive gold. As gold is priced in greenbacks, a weaker buck usually supports higher spot prices.

USD has declined against almost all its major peers in 2016 as the Fed has indicated it’s in no rush to raise rates.

And while equities have recovered from there February funk, there is something of a safe haven play at work as we see the yen continuing to strengthen. Gold’s safe haven demand cannot be understated, particularly as US rates remain so low.

Golden Cross

From a technical point of view, gold’s surge comes after a bullish signal triggered earlier this year. The so-called Golden Cross came in late February, when gold’s 50-day moving average broke through the 200-day moving average.

The move is often seen as a bullish indicator by traders and its subsequent rally fits into this narrative. Golden crosses like this tend to be a flag for short-term bullishness, and it’s unclear whether there is any momentum left as gold approaches some pretty stern resistance levels.

Commodity Rally

Gold is not the only metal on the up this year. Silver has recently exploded, riding on the coat tails of its yellow cousin. Copper has also recovered from its January lows and oil has bounced back some 80% from its February trough, when crude was trading at 12-year lows.

Of course, as a safe haven asset, gold is a very different trade to other commodities, which means the outlook for the rest of the market doesn’t necessarily mean much for the yellow metal.

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